The Transportation Security Administration and the Aviation-Security Fee

December 10, 2013

Background and Budget

The Transportation Security Administration (TSA) was established by the Aviation and Transportation Security Act of 2001 to “protect the nation’s transportation systems to ensure freedom of movement for people and commerce.” Although TSA has security responsibilities in all forms of transportation, its main focus is aviation security.

TSA has just over 55,600 full-time equivalents (FTE), the vast majority of which are passenger and baggage screeners in the Aviation Security program. (By contrast, fewer than 700 FTEs are involved in Surface Transportation Security.) In recent years, TSA has received around $5.7 billion in mandatory and discretionary appropriations, which—together with spending authority from offsetting collections—gives the agency an annual budget of more than $7 billion. Aviation Security takes the lion’s share of this budget, and its funding is used for passenger- and baggage-screening operations, screener salaries and benefits, and contracts with private screeners, among other activities.

TSA receives about $2 billion a year in offsetting collections under current law, through air-carrier and aviation-passenger security fees. The largest of the fees, in terms of total collections, is the Aviation Passenger Security Fee (sometimes called the September 11th Security Fee), which brings in about $1.7 billion a year.[1] By law, the first $250 million of passenger-security fees is set aside for the Aviation Security Capital Fund, which provides for airport-facility modifications and certain security equipment. In total, TSA security fees cover about 30 percent of the agency’s aviation-security costs.

Before 9/11, the airlines themselves paid for and carried out passenger- and baggage-security screening. In 1998, the FAA wrote a report for Congress on Civil Aviation Security Responsibilities and Funding. This report described an aviation-security process shaped by the modern threat of international terrorism. It emphasized two aspects of the current set-up: First, air carriers bore the primary responsibility for applying security measures to passengers, crews, baggage, and cargo. And second, the FAA required air carriers and airport operators to maintain the minimum amount of security necessary to meet the level of danger.[2]

The Aviation Passenger Security Fee

With the formation of TSA and then the Department of Homeland Security came a mandate to substantially increase and coordinate aviation-security procedures. TSA screeners were deployed to airports across the country. To pay for these new operations, the Aviation and Transportation Security Act instituted an aviation-passenger security fee, which was to cover the costs of security operations including technology, salaries and benefits of screeners, the air-marshals program (Federal Security Managers), capital improvements, etc.[3] The act also stipulated that “the Undersecretary shall ensure that the fees are reasonably related to the Transportation Security Administration’s costs of providing services rendered.”[4]

Passengers, then as now, were charged $2.50 per enplanement with a maximum one-way-trip fee of $5.00. In other words, a passenger taking a non-stop flight would pay a total of $2.50, while a passenger with at least one connecting flight would pay $5.00.

Reform Proposals

As noted above, the TSA aviation-passenger security fee has not increased since it was instituted in 2001. The House-passed budget resolution proposed to change the aviation-passenger-security-fee structure, beginning in 2015, to a simple one-way-trip maximum of $5.00—regardless of the number of enplanements. All one-way trips would incur the $5.00 fee, not only those with connecting flights.

The Obama administration has proposed changes to the fee in all five of its budget submissions. The President’s 2014 budget, for instance, would not only change the fee structure to a per-one-way-trip charge, but would increase it by 50 cents per year until 2019, when the fee would reach $7.50 per one-way trip. If the administration’s fee increase was enacted, it would cover 57 percent of TSA’s aviation-security operations.

The Bipartisan Budget Act would establish a simple $5.60 one-way fee, effective July 1, 2014. It would also eliminate the ASIF fee charged to air carriers. The higher passenger fee collections would allow TSA to ultimately offset about 43 percent of aviation-security costs.

[1] Air carriers are charged an Aviation Security Infrastructure Fee (ASIF), which accounts for about 20 percent of total fees collected.